EU commissioner unleashes draft data protection bill

European Commission vice-president Viviane Reding was forced into a defensive corner today, after putting forward her proposed rewrite of the EU's 17-year-old data protection law.

She claimed nothing had been "watered down" in the draft bill she tabled. Earlier reports had suggested that Reding was expected to propose that companies in violation of the proposed law could be fined up to 5 per cent of their global annual turnover.

The draft bill published today in fact confirms that penalties of up to €1m, or up to 2 per cent of an outfit's global annual turnover, would be slapped on businesses that mishandle their users' data.

Reding described the "protection of personal data" as being "a fundamental right for all Europeans". She added that many EU citizens continue to fret about who has control of their private information.

"My proposals will help build trust in online services because people will be better informed about their rights and in more control of their information," she said.

"The reform will accomplish this while making life easier and less costly for businesses. A strong, clear and uniform legal framework at EU level will help to unleash the potential of the Digital Single Market and foster economic growth, innovation and job creation."

The justice commissioner is calling on two major changes to European law. She wants a rule that sets out the general EU framework for data protection and a separate directive on safeguarding personal data that is processed by judicial authorities for purposes that include investigation of criminal offences.

Here are the major proposals outlined in Reding's draft bill:

A single set of rules on data protection, valid across the EU. Unnecessary administrative requirements, such as notification requirements for companies, will be removed. This will save businesses around €2.3 billion a year.

Instead of the current obligation of all companies to notify all data protection activities to data protection supervisors – a requirement that has led to unnecessary paperwork and costs businesses €130 million per year, the Regulation provides for increased responsibility and accountability for those processing personal data.

For example, companies and organisations must notify the national supervisory authority of serious data breaches as soon as possible (if feasible within 24 hours).

Organisations will only have to deal with a single national data protection authority in the EU country where they have their main establishment. Likewise, people can refer to the data protection authority in their country, even when their data is processed by a company based outside the EU. Wherever consent is required for data to be processed, it is clarified that it has to be given explicitly, rather than assumed.

People will have easier access to their own data and be able to transfer personal data from one service provider to another more easily (right to data portability). This will improve competition among services.

A ‘right to be forgotten’ will help people better manage data protection risks online: people will be able to delete their data if there are no legitimate grounds for retaining it.

EU rules must apply if personal data is handled abroad by companies that are active in the EU market and offer their services to EU citizens.

Independent national data protection authorities will be strengthened so they can better enforce the EU rules at home. They will be empowered to fine companies that violate EU data protection rules. This can lead to penalties of up to €1 million or up to 2% of the global annual turnover of a company.

A new Directive will apply general data protection principles and rules for police and judicial cooperation in criminal matters. The rules will apply to both domestic and cross-border transfers of data.

Now Reding's draft bill will wind its way through the European Parliament as well as the Council of Ministers, where EU member states will get the opportunity to scrutinise the proposal. Only after that point will it become clear whether the planned overhaul of Europe's data protection law is passed, heavily amended or altogether ditched. ®